Adani stocks cut weekly losses on relief from SC-probe panel report


MUMBAI: Shares of companies in the Adani group rallied on Friday, trimming their weekly losses after a Supreme Court-appointed panel found no conclusive evidence of stock price manipulation alleged by the US short seller Hindenburg research.
Flagship Adani Enterprises Ltd increased by 3.5% due to the court rulings. Other group units like Adani transmission Ltd and Adani Power Ltd closed up around 5%. Adani Ports and Special Economic Zone Ltd up 3.5%
Late Friday’s recovery helped the group trim its weekly losses to around $4.5 billion from as much as $10 billion earlier in the day. This was weighed down by MSCI Inc.’s move to exclude two companies from India’s rating and concerns about possible dilution from a fundraising plan.
The panel set up by the Supreme Court said the Securities and Exchange Board of India’s surveillance system had found “no consistent pattern of abusive trading” in the flagship’s shares.
Adani Total Gas Lt – along with Adani Transmission one of two stocks removed from the MSCI India index at the end of this month – had its worst week since the end of February. Adani Transmission is down about 11% this week. Brian Freitas, an independent equity analyst who publishes on Smartkarma, predicted that the foreclosures will likely trigger a sale of around $390 million worth of passive funds.
Flagship Adani Enterprises, incubator for many of the group’s investments, ended the week down 0.4% after at times experiencing its worst week since March. The company and its transferring entity last week announced plans to raise $2.6 billion through a qualifying institutional placement or other avenues, raising concerns about equity dilution.
Share sale concerns
“If shares are undervalued on a QIP issue, it could be taken as a sign of weakness or desperation,” wrote Arpit Shah, fund manager at Care Portfolio Managers, via email.
Adani shares have been trying to regain a foothold after fraud allegations from Hindenburg Research triggered a crash in late January that at times wiped out over $150 billion of the group’s market value. Shares rallied after GQG Partners bought shares in four of the group’s companies in early March, giving a vote of confidence. The market cap loss is currently $122 billion.
Adani has denied Hindenburg’s allegations and, following the report, has taken steps to allay investors’ concerns about debt and corporate governance.

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